PRICE LINKS AMONG QUALITATIVELY DIFFERENTIATED MEATS: EVIDENCE FROM THE UK WHOLESALE BEEF MARKET

Abstract

This work investigates the price links among four quality differentiated beef meats in the UK using the recently developed QVAR connectedness approach. The empirical results suggest: (a) Prices are more tightly linked to each other under extreme shocks (regardless of sign) than under small shocks. (b) Higher quality meats tend, in most cases, to be net transmitters of price shocks to lower quality ones. (c) The strength and the internal structure of the four-market network are time-varying; in periods of economic turmoil, the level of total connectedness rises and the position of individual markets in the network as net transmitters or receivers of price shocks may change.

Keywords

• quality
• price transmission
• beef
• uk
• asymmetry